Your right the building standards are a factor, particularly here where they had the earthquake in 1995. Think they lifted their standards after that, here at least. Will have a look and see if there is any obvious increase in prices for properties built after the quake. Cant see myself getting a loan from my company as I dont have one. I just work about 7 or 8 hours a week and they are basically just private lessons or in small schools. I get an allowance from the Japanese govt and uni is paid for by them so I dont need to much and dont have much time to work. I can get interest free loans from them but the limit is about 150000yen so wouldnt mean much and has to be paid back within a few months. If u get any cool ideas or interesting stuff please give me a mail or a message.

I agree with you that hidden costs would be the worry here, particularly due to the language. I would also want to find some good research material hopefully in english before going anywhere. I also agree that for cash flow rather than capital gains this could potentially be a great situation with such low interest rates and with good cash flow any further drop in the market could be ridden out.
Regarding Aus versus Japan, until the last few days my plan was to graduate in 2 and a half years with some cash and work for 3 years to get more cash while putting it all in some sort of fund back home, probably an index fund. I thought that by the time i got home in 5 years the Australian market would hopefully have rationalised a bit. But from this post and others and a bit of looking around over the last few days the Japanese market has caught my attention. I think with such a depressed market there has to be heaps of bargains around as there is such negative sentiment around and nobody seems to be considering investing locally. I think anything other than sticking your money under the mattress is unpopular here at the moment. Saw a figure that I have my doubts about that there is US500bn dollars under Japanese mattresses cause they have no confidence even in the banks(especially the banks). With this reluctance to buy and financial hardship forcing many to sell there must be opportunities everywhere. I would be reluctant to enter the Australian market at the moment because I gather from this forum to cashflow any property would require some more creative ideas like wraps or renovations or something like that and I would probably want to start on something more simple like a standard buy and hold strategy. So for that reason the Japanese market would be more attractive i guess.Some other drawbacks to investing in Japan that i can think of off the top of my head is that I only have a student visa with permission to work part time atm rather that a work visa so that may affect things. Also I dont know how the banks would like me going home while still having loans. And if that was ok and I went home I wonder how much business I could conduct coming back on just a tourist visa if i had to in the future. These are just some ideas I have thought of. May not be a problem but would just have to find out. Also going around and conducting interviews to build a team seems dawnting enough at home let alone in Japan but it would be a learning experience.
Have I thought much about investing in Japan? To be honest, until about 2 or 3 days ago….nope. But atm I am very keen to at least look further into it and see what the possibilities are. Plan to talk to a mate from NZ in a few days who has married a Japanese girl and bought an apartment here and see if i can learn a bit from him and then maybe look around for a few resources and see what the story is about finance and so on. I dont know what to expect but just quickly last night I looked at the Japanese Yahoo in the real estate section and found a place in ten minutes for 4800000yen in the centre of Kobe with 3 bedrooms, living room, laundry and kitchen. It was a bit old admittedly but my friend and I both agree that it should confortable rent for way more than 150000yen per month from our experience of renting here. However that is a rental yield of 37.5 percent I think so I believe i must have missed something or the place must be in very bad condition. It was about 28 years old and while being listed in order of price was surrounded by one bedroom places so something is amiss i think. Either way is definitely worth further inspection.

real estate investing in japan is very different from the standard australian concept of investing. This is because the prices are so high. During the real estate bubble which burst in 91 the aggregate value of all the real estate in Japan was worth 50% more than the rest of the world put together.prices have gone down alot since then but i think u get the picture that real estate investing is not for the average person. Middle class families spend their lives paying off their box(apartment). also real estate investing is a bit of a dismal science over here at the moment. Just this thursday they released the national real estate growth figures for last year. It was the 12th consecutive year that prices had fallen.
Another consideration i the fact that your investment as a foreigner would not be welcome over here. Dolf de roos in his book real estate riches specifically mentions Japan as the prime example of a country which makes it very difficult legally for foreigners to invest. I cant give u specifics on how but i am certain that it would be an extremely difficult and frustrating experience investing here.
Also keeping in mind how rediculously expensive property is here the only place most of us could afford would be out in the sticks. That then begs the question about how important population growth is to u, because there is no country areas with population growth. The national population is meant to stop growing in 2005 and there is a massive exodous from the country to the city.thats just what i reckon anyway.

i just saw an ad a while ago for finance from japanese banks for investing in real estate in the US, UK, Aus and i think NZ. I didnt take too much notice because i wasnt really interested then.was maybe about the end of last year. dont know if it is just for japanese people or what.have heard from somewhere that u can be a foreigner but must be working in Japan and earning yen. dont know if that is just when u apply for the loan or for the term of the loan or what.just remember that the rate they were offering was about 1%.that would make nearly any property cashflow positive. would imagine that they might be willing to lend in aus dollars which would take away risks involved with exchange rates as all the banks here advertise for people to invest in aus dollars so they must like it as an investment option.
i think i will have to work here for maybe 2 or 3 years after graduation because my degree wont be very well known at home but is very well known here. i will apply for jobs here and home and maybe the us and uk and see what happens but my best chance is here i think. but then i wanna get home after a few years hopefully with some cash to start investing. so now i am just learning. i would like to start now but i dont have any money and also have basically no bank records in aus so it would be difficult to get a loan i think while working here. also going on dolf de roos book with the 100-10-3-1 rule i would not be able to spent enough time at home to look at enough properties to be confident of my decision i think.

When I said that interest rates would rise I was talking medium term. Lots of real estate commentators seem to think that there will be a change in the stange of monetary policy stance to contractionary in about 2 or 3 years. Have heard 2006 mentioned more than once although that is not much more than a stab in the dark. Entelechy was correct about the exchange rate comment which I hadn’t thought of before although the rise in the ex rate because of an interest rate rise would be lessened because of the crowding out effect of the rate rise on investment. But still the ex rate concerns may mean the RBA may want to wait for the Feds in the US to raise theirs a bit which is not coming until fears about deflation go away. So I guess in summary I think that interest rates wont go up much in the short term but in the medium term they are coming. The RBA is going to want to reign in the spending in residential property eventually and once this does it may give the gov’t an opportunity to act in some form on negative gearing. Particularly if the market goes down quickly and wipes out alot of negative gearers there will be alot of angry people who may feel resentful towards those who sold them the negative gearing idea and negative gearing may go out of fashion very quickly. This could give the gov’t even more room to move.

Just to continue on from what I said earlier, what does everybody think will be the future of negative gearing? I dont mean for investors but rather legally. I believe Australia is one of the few western countries that still allows the interest to be deducted from income for tax purposes(am not certain of this and welcome correction) and I was just thinking that perhaps it’s days may be numbered here too. I understand the possibility of getting rid of this deduction was raised in political circles recently although it was shot down pretty quickly. I am just thinking that maybe the politicians realise that getting rid of it now would be political suicide because everyone is so geared at the moment and it would completely wipe out the real estate market so they are maybe waiting for the eventual interest rate hike to rationalise the market a bit. It would take out of the market those extremely vunerable negative gearers then perhaps the politicians would consider getting rid of negative gearing. I would imagine that given the amount of money being poured into the market at the moment the gov’t would be in for a huge revenue windfall if they were to get rid of it in a period when the market is less overheated.